MPs have urged the government to redefine what it classifies as “affordable housing” to link its meaning to average earnings rather than a market house prices.
Opening a House of Commons debate on housing on Monday, Conservative MP for Newton Abbot Anne Marie Morris said the current affordability targets were “not strong enough”.
She said: “On affordability, I do not think that any hon. Member present disagrees that 80 per cent of the market [value] frankly does not represent anything affordable.
“The problem is that the link is with the market price of the house, not the average salary.”
Morris admitted that creating this link between house prices and earnings would result in “a huge funding gap that will have to be met from somewhere”.
She argued that local authorities should be given more power to set and enforce affordability targets, warning that councils are too often forced to cave into developers’ attempts to water down affordable homes requirements, because they cannot afford to lose the community infrastructure levy or new homes bonus.
Labour MP for Mitcham and Morden Siobhain McDonagh also highlighted the gap between wages and house prices during the debate.
She said: “Since 2010, housebuilding has fallen to its lowest level since the 1920s. Rough sleeping has risen every year, rents have shot up faster than incomes, there are almost 200,000 fewer homeowners and new affordable housebuilding is at a 24-year low.
“Meanwhile, average house prices are at a record high of almost eight times the average income, yet we wonder why home ownership is at its lowest level in Britain since 1985.
“In reality, although 1.2 million people are on housing waiting lists across our country, this Government delivered just 6,464 social homes in 2017-18.
“That is simply diabolical when compared with the 150,000 social homes delivered every year in the mid-1960s.”
Housing Minister Kit Malthouse responded to several other areas of the debate, however he did not refer to the call by Morris for a new affordability definition.
Morris closed the debate by calling for a response on the issue:
She said: “We still have not addressed the link between house prices and wages; I would like the Minister to look at that as a matter of urgency.”